Note: Due to the high level interest in this program, funding for this program has been exhausted for the current fiscal year. A waiting list has been created for projects that the Maryland Energy Administration intends to fund by June 30, 2009 using proceeds from the Regional Greenhouse Gas Initiative (RGGI). Applications received after November 30, 2008 will be put on a separate waiting list for FY 2010 funding. Program rule and incentive level changes scheduled for Spring 2009 will likely result in FY 2010 terms different than those described below. The current waiting list can be accessed at the program website listed at the top of this page.

Maryland's Solar Energy Grant Program, administered by the Maryland Energy Administration (MEA), provides financial incentives to homeowners, businesses, local governments and non-profit organizations that install solar water-heating systems or solar-electric (PV) systems. Both grid-connected and off-grid PV systems are eligible for support. This program, which took effect in January 2005, replaced the state's expired "Clean Energy Incentives" tax credit for solar-energy equipment. The first three rounds of program funding supported 227 projects and applications continue to be accepted at this time.

The Solar Energy Grant Program provides incentives as follows*:

The lesser of $3,000 or 30% of the cost for solar water heating equipment;

$2,500 per kilowatt (kW) up to $10,000 for solar PV systems.

The maximum size for solar PV systems is 20 kW. Requirements for the minimum size of a system eligible for funding follow the same guidelines as the U.S. Department of Energy's Million Solar Roofs Initiative. They are as follows:

Solar water-heating systems for residential, school or public buildings: 20 square feet of collector area (or 1 kW equivalent)

PV system hardware must be in compliance with all applicable performance and safety standards, including: Underwriters Laboratories (UL) 1741, "Standard for Static Inverters and Charge Controllers for Use in Photovoltaic Systems" and UL 1703, "Standard for Safety: Flat-Plate Photovoltaic Modules and Panels." The system must be installed in compliance with applicable requirements of local electric codes and the National Electric Code (NEC). Utility interconnected (grid-tied) systems must be installed in compliance with IEEE Standard 929-2000, "Recommended Practice for Utility Interface of Photovoltaic Systems."

For an application and more information on the program, including a Q&A section, see the program web site.

Note that these grants may be subtracted from adjusted gross income for state income tax purposes. In other words, program recipients do not have to pay state taxes on the amount of the grant received. See House Bill 590, enacted in May 2007.

*H.B. 377 also allows program managers to adjust grant amounts to reflect market conditions and prices, subject to the limitations described above.

In accordance with Maryland Property Tax Code § 9-203, Howard County allows a property tax credit for certain renewable energy devices. Real property owners may receive a property tax credit against the county property tax imposed on a residential structure that uses a solar or geothermal energy device. The amount of the tax credit is 50% of the eligible costs up to $5,000 for a photovoltaic (PV) or heating system (geothermal or solar), and $1,500 for a hot water supply system. All equipment must meet safety and performance standards set by a nationally recognized laboratory for that kind of device.

The amount of credit applied in a tax year may not exceed the amount of property tax imposed for that year, but any amount not taken may be carried over for an additional two years. During a fiscal year, the total amount of all tax credits granted in the county is limited to $250,000. Eligible applicants should submit their applications on or before April 1 prior to the taxable year for which the credit is sought. Work must be completed in the 12 months prior to an application in order to be eligible for the tax credit. The program webpage listed at the top of this page contains the application for the credit.

This local option tax incentive is unique because it is applied in the form of a credit -- not an exemption or exclusion, as in the case of most other property tax programs.